Bad Customer Experience: What Is The Real Cost For Your Company?
“The customer is always right”, an old motto companies know pretty well. The foundation of every engagement and loyalty strategy. Sure, positive experiences are important, but is it really dangerous to underestimate the impact of unhappy clients?
What is the real cost of a single dissatisfied person trapped in a bad customer experience?
They say mobile technology has given life to a brand new generation of customers: connected, empowered and demanding. They say clients have replaced products as the cornerstone of marketing strategy. What does this mean for your business?
As recently as ten years ago, the conversion path was completely different, more straightforward and easy to understand. Now, with the spread of smartphones, disruptive mobile devices and other smart objects (the so-called Internet of Things), the customer journey map has gone from linear to multi-faceted. As a consequence, the design of a satisfying omni-channel experience becomes all but easy.
CUSTOMERS EVOLVE. DO YOU?
Customer satisfaction is as old as commerce; digital customer experience, however, is way more than just satisfaction or good service. The main reason why so many companies still struggle to deliver amazing experiences is that they keep focusing on the wrong priority: they think about ‘product improvement’ where the key is ‘people empowerment’.
The experience is not carved in stone; it’s just a framework shaped day after day, as the sum of client’s perceptions of all interactions he has with your company, across all touch points and devices. As customers evolve, so do their needs or desiders, and the minimum requirements for a positive experience.
85% of business leaders agree that traditional differentiators alone are no longer a sustainable strategy. 71%, in addition, believe that customer experience is the next battleground for competitive brands (Shaw & Ivens). Problem is, there is a huge gap between what they believe they offer and what they ultimately deliver:
Only 26% of companies have a well-developed strategy in place to improve customer experience (Econsultancy);
80% of companies say they truly believe they offer a ‘superior’ experience. Only 8% of people think the same companies actually deliver a ‘superior’ experience. (Brad Tuttle, Customer Service Hell).
In one sentence: they commit the 7 deadly sins of customer experience, the seeds of a digital marketing failure.
THE TRUE COST OF BAD EXPERIENCE
The creation of a customer experience management strategy is widely considered expensive. Is it really worth investing in improving the connection with clients? The constant flow of new clients should always overshadow the few that have had a bad experience (in this context, acquisition is considered more critical than retention).
This may have been true in the pre-Internet era, where one-way communication was the norm and interruption the rule (just think about traditional advertising). In the post-Internet era, loyalty delivers the real value; the only chance to overcome the challenge of open markets is to shift from a brand-centric to a customer-centric approach, in the name of inbound methodology.
In the end, customers always punish poor experiences:
86% quit doing business with a company because of a bad customer experience;
89% began doing business with a competitor following a poor customer experience;
51% said they would only try to reach support once before giving up a purchase;
A dissatisfied customer will tell between 9 to 15 people about the bad experience;
24% of customers who had a poor experience shared the experience through social networks.
Again, bad service is more expensive than you think. It damages your brand identity and costs billions of dollars: 338.5 in the whole world every year, according to CX Impact Report. Financial services, retail, insurance and transportation are the hardest hit industries (Genesys Globar Survey). And keep in mind that only 4% of disappointed customers directly contact the company. Just the tip of a huge iceberg.
THE REWARD OF GOOD EXPERIENCE
There is a new motto for the Age of the Customer: “Customer experience is the new marketing”. We don’t want to deny the value of the traditional 4 P’s of marketing, but it’s clear you can’t rely only on price, product, place and promotion to differentiate yourself from competitors and win customers’ heart.
To build a distinct brand image and retain the attention of clients during all steps of their journey, you need something more: engagement and loyalty. And the only way is to build a great experience, unique and fulfilling. Only then will customers reward your efforts, and you will ensure successful performances in the long term.
86% of customers say they are willing to pay more for a better experience;
It is 6 times more expensive to acquire a new client than to retain an old one;
78% of customers usually recommend a brand to friends after a great experience;
A loyal customer is worth up to 10 times as much as his/her first purchase.
Delivering great customer experiences almost always boils down to one thing: being able to live the connection from your customers’ point of view. This journey begins by understanding what your clients are going through, especially when the experience is not as positive as you thought it was.
Build your business around what matters most: loyal customers.
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The improvement of customer experience is the reason why we crafted the DCX 7-Steps Checklist, a useful guide with requirements and insights for a successful digital transformation. You can download the free paper here: